Level Up Mortgage Lending | Conventional Loan

Rental Property Loans (DSCR)

Rental Property loans also known as DSCR Loans allow investors to build wealth by acquiring and renting out properties. DSCR stands for Debt Service Coverage Ratio and allows investors to qualify for financing based on the potential rental income from the property. These loans typically require a larger downpayment than fix and flip loans, usually around 20%

However, borrowers with decent credit and the neccessary downpayment funds can secure a lower interest rate and extended terms with a DSCR loan. DSCR Rental Property loans can be used to purchase a variety of property types, including single-family homes, multi-unit properties, and condominiums.

Level Up Mortgage Lending | Conventional Loan
Level Up Mortgage Lending | Conventional Loan

Rental Property Loan Characteristics

1) DSCR loans are not backed by the government and are subject to the lender's guidelines and underwriting standards.

2) Typically require a higher down payment of 20-25% of the purchase price

3) Credit requirements are similar than Fix and Flip loans, with lenders typically looking for a credit score of at least 620

4) Borrowers with excellent credit may be able to secure lower interest rates and longer terms on a DSCR loan compared to an Fix and Flip loan..

5) Rental Property loans offer options for fixed or adjustable interest rates

6) Rental Property (DSCR) loans can be used to purchase a variety of property types, including single-family homes, multi-unit properties, and condominiums

7) Rental Property loans do not require mortgage insurance if the borrower puts down at least 20% of the purchase price

8) Rental Property loans offer options for refinancing, including cash-out refinancing and rate-and-term refinancing, which can help borrowers l access equity in their home to renovate and rent the property,

Level Up Mortgage Lending | Conventional Loan
Level Up Mortgage Lending | Conventional Loan

5) Conventional loans offer options for fixed or adjustable interest rates

6) Conventional loans can be used to purchase a variety of property types, including single-family homes, multi-unit properties, and condominiums

7) Conventional loans do not require mortgage insurance if the borrower puts down at least 20% of the purchase price

8) Conventional loans offer options for refinancing, including cash-out refinancing and rate-and-term refinancing, which can help borrowers lower their monthly mortgage payments or access equity in their home.

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